Heating & energy

Heating options

Updated 02 Apr 2009

Introduction

Prices for most home-heating fuels have gone up over the last year. We take a look at your options and pick those that damage your wallet - and the environment - the least.

We compare the running costs and environmental impact of 9 ways of heating your home. We also explain your best choices for heating a single room or the entire house.

Note: this report is a guide only and does not contain test results.

Energy sources

Wood

How expensive?

Nothing is cheaper than free heat - and that's possible if you have a woodburner and can get free firewood. But even if you have to buy firewood, running a woodburner is still one of the cheapest ways of heating your home.

Tip: Firewood prices vary considerably, so shop around and buy at least six months before winter (when prices are likely to be cheaper).

How clean?

Along with wind and hydro, wood is one of the few sustainable carbon-neutral home-heating options. But to get the most heat (and the least pollution), it must be burned hot and in a specially designed firebox. The firewood must also be dry and not too big.

Persisting with an old woodburner or an open fire is throwing away heat and creating health-threatening pollution.

What about open fires?

We haven't included the running costs of open fires using wood or coal in our fuel price comparison, because the figures are off the scale. Open fires cause massive pollution for the heat they produce. And they don't heat the house very well.

More information

Wood pellets

How expensive?

A pellet burner is worth considering if you buy firewood. Their running costs are slightly higher than a woodburner's but you don't have to deal with large amounts of firewood. They also have the advantages of thermostatic and timer control, along with automatic starting on some models.

Tip: The price of wood pellets varies substantially depending on where you live. Check out prices in your region before buying one of these burners.

How clean?

Pellet fires produce less atmospheric pollution than conventional woodburners - and they're carbon neutral because the pellets are made from wood shavings.

Pellet burners - our buying guide

Electricity

How expensive?

Electricity prices have risen approximately 13 percent in the last year.

Heat pumps are still one of the cheapest heating options and can be retro-fitted into an existing house. But they must be the right capacity for the house and they must be installed properly. Heat pumps can give you enough heat for the average home without having to install special (2- or 3-phase) wiring.

Portable heaters are cheap to buy - although their running costs are quite high (an average of 23 cents per kWh). They're good for that extra temperature boost in specific areas like bedrooms and work areas. For modern well-insulated homes we recommend convection or oil-column models. For poorly insulated older houses with high ceilings, radiant heaters are likely to be more effective - but not in bedrooms or around young children.

To reduce the running costs of portable heaters to half or less, you need to spend money on more expensive and permanently installed equipment. Discounted night rates for night-store heaters and underfloor heating require a separate meter (check with your power company). Underfloor heating can be laid under floating laminate flooring or ceramic tiles; in a new house it can be embedded in an insulated concrete pad.

How clean?

Our electricity comes from a combination of renewable (wind, hydro and geothermal) and non-renewable (gas and coal) sources - so it's only a semi-clean fuel. But in your home, nothing is cleaner. Despite the inexorable rise in the price of electricity, electric heating provides a clean and easy way to heat your home - especially if the house is rented.

More information

Natural gas

How expensive?

The price of natural gas has stayed relatively constant over the last year. Running costs depend on how you factor in the daily connection charge. If you have a lot of gas appliances (such as heating, water heating and cooking), the connection charge is less significant.

The days of natural gas being a no-brainer for home heating are over: it's still cheaper than electricity for stand-alone heaters, but heat pumps (and, in some cases, night-rate electricity) are cheaper.

Gas has advantages, though. You can get a lot of heat from it - enough for instant hot water and central-heating units.

Make sure every gas appliance you buy has a flue. Unflued gas heaters fill the house with carbon dioxide and water vapour - and if a fault develops, you might end up with carbon monoxide (which is toxic). Even without the carbon monoxide, this is bad news: you might have a warm home, but it'll be damp. If you rent, the need for a flue means gas appliances are off the shopping list.

How clean?

Natural gas is clean-burning for pollutants, but it's a fossil fuel. Burning it adds the "greenhouse gas" carbon dioxide to the environment.

More information

Compare the costs of various gas plans

LPG

How expensive?

LPG is now imported and no longer cheap after paying the world price and the cost of getting it here. (See our report on LPG prices for more information.)

The 45kg cylinders delivered to your home cost about $2.50 per kg - that includes rental of the cylinders and delivery. LPG heating appliances using 45kg bottles have running costs broadly similar to those of electric appliances (but not heat pumps).

The 9kg cylinders filled at service stations cost about $3.50 per kg. You also have to buy the cylinder yourself ($45 each) and take it to the service station for filling. That's expensive - around 30 cents per kWh. Running an unflued LPG cabinet heater on a 9kg cylinder is not only a health and safety hazard but also the most expensive way to heat a home.

How clean?

Like natural gas, LPG is clean-burning but adds carbon dioxide to the environment.

Diesel

How expensive?

A couple of years ago, diesel was relatively competitive for home heating. Then along came the big price hikes of a year or so back. Now diesel prices have retreated and prices are broadly comparable to those of natural gas and 45kg LPG cylinders.

The price fluctuations of the last few years highlight the financial risks with this fuel. Diesel is a world commodity and subject to rapid price changes that are completely out of the householder's control.

How clean?

Now that we have low-sulphur diesel fuel, it's relatively clean in terms of pollutants. But it does come from non-sustainable fossil fuel and adds to carbon dioxide emissions.

The sun

It's free, and the most environmentally-friendly home heating option available. You'll need large north-facing windows to allow the sun to shine in during the day, a large thermal mass such as a concrete floor to store the heat, and insulation so the heat isn't lost too quickly at night. And you'll probably still need other heat sources for the coldest days.

If you're designing a new home, incorporating some passive solar heating into the design may not cost very much at all. It may also be possible to include some solar features when you're renovating, but it's harder.

More help

Heating a room

There are several options to heat a single room.

Electric heating

The simplest option is often electric heating. This is the best choice if you only need to heat a single person, say if you find yourself getting a bit chilly sitting at the computer, or watching telly. There are two suitable types. A radiant heater has an element that gets red hot and will "shine" heat onto you, or a small fan heater will blow warm air at you.

For more widespread heating, we recommend oil column heaters, particularly for children's bedrooms, as they're silent and the surface temperature of the heater is not dangerously hot. You could also consider other convection heaters such as a panel heater, or fan heaters. A fan heater, although noisy, does have the advantage of moving warm air around the room to keep the temperature even.

For more information, see our guide to choosing an electric heater. To work out what size (capacity) electric heater you will need for a certain size room, see our interactive calculator - What size heater do you need?

A more energy-efficient option is a heat pump. These can be small enough to heat just one room or large enough to heat a big open plan area. They are moderately expensive to buy and install but have low running costs. You can use the thermostat to set the temperature exactly where you want it. And in summer they can be used for cooling.

Another option is radiant ceiling panels. The most common type consists of a heating foil which is installed between the framing and the ceiling plasterboard. To prevent the ceiling plasterboard from overheating and possibly cracking, a special thermostat with an additional sensor buried in the ceiling should be fitted.

Ceiling heating provides very pleasant and fast-acting warmth. Retro-fitting to an existing house is mostly possible, but expensive.

Gas heating

Gas options include flued or unflued natural gas or LPG models. We don't recommend unflued gas heaters, as they release water vapour and potentially-harmful exhaust gases into your home (see our March 2009 news item for more on this).

We prefer gas heaters to be fixed to the wall, and we recommend you use the type that has the flame totally enclosed. That way the heater can't tip over and there is no naked flame to create a fire hazard.

Heating the whole house

If you want a system that will heat the entire house, one thing to factor in is that not all parts of the house have to be at the same temperature. So, bedrooms, kitchens and bathrooms can be kept at a lower temperature than living areas such as lounges and studies. Ideally, any home heating system should be set up with at least two individually-adjustable temperature zones.

There are two broad approaches to heating a home: heat the air in the home, or heat the contents of the home (including the people). Generally, heating the home and its contents will give less condensation and a less stuffy feel than heating the air alone. The most effective way to heat the contents of a home is to warm the floor. The next most effective way is to warm the ceiling.

Underfloor heating

Underfloor heating is most easily achieved when a home is being built, but retro-fitting can be done in some cases. The most flexible method is to bury hot water pipes in the concrete foundation slab. The water can be heated using gas, or a diesel boiler, or even solar panels.

A popular variation is under-tile heating. Here, electric cables are laid between the existing floor and ceramic tiles. This method is useful anywhere tile floors are laid, including existing homes. To keep running costs down, a thermostat with an additional sensor buried in the tile floor is desirable.

Underfloor heating has one potential disadvantage. If a fault develops with the water piping or electric cable, it's a major problem to fix. Use the best components available.

Ducted central heating

Another option for the whole house is ducted central heating. A gas or diesel central heating unit, or a heat pump, is mounted under the floor, or in the attic space, or outside the house, and warm air is ducted to the various rooms. These systems can be set up so that some rooms are kept at a higher temperature than others.

Woodburners and pellet burners

Modern, high-output woodburners and pellet burners can heat an open-plan house well. While they're generally less suitable for older style homes with separate, smaller rooms, there are a couple of ways you can set them up to heat a whole house. One is to buy a wet-back heat exchanger for the fire. This can be connected to water-filled radiators in other parts of the house. While effective, it is expensive.

Much cheaper is a ducted heat transfer system that pumps hot air from the room where the woodburner or pellet burner is, to cooler parts of the house.

We strongly recommend you use an experienced heating engineer if you're thinking of getting a heating system for your whole house. Ask how long they have been in business, and if they will provide a certificate of compliance for any electrical work. Make sure you have a clear description on the size and complexity of the job - you may require a consent from your local authority. That way you are likely to get a system that performs well, and you will have some comeback if things go wrong.

Fuel prices compared

Guide to the table

All costs are in cents per kWh.

Prices were correct as at March 2009.

Our advice

The two cheapest and also environmentally sound home-heating options are firewood in a modern woodburner and wood pellets in a pellet burner.
Electric heaters of some kind are the best overall choice for people who rent. Heat pumps are the cheapest-to-run way of electrically heating the whole house.
Reticulated natural gas is still a good option for those who have access to it - but if you take the connection charges into consideration it's not cheap any more. LPG is more expensive than reticulated gas.
The capital cost may make some heating options uneconomic, depending on your circumstances. (see below).

Capital costs

There's often a trade-off between running costs and the capital cost of the heating system. It's rather like the eco-friendly and economical car, which costs more to buy than the thirstier model.

Fifty dollars or so will get you an oil-column heater that costs you over 20 cents per kWh to run. Spend between $2000 and $3000 on a gas heater or a wood burner and the running costs will be about 10 cents per kWh. But spend $10,000 or so on a central-heating plant, and the running costs will drop only a cent or two - although the capital cost of the central-heating plant could well increase the marketability (and value) of your house.

Useful links

For more details on heating options, and tests of various types of heaters, see our other reports:

Report by Bill Whitley.